Shin Kong back in profit on falling NT dollar, hedge costs

By Crystal Hsu / Staff Reporter

Shin Kong Financial Holding Co (新光金控) swung back to a profit last month on falling foreign currency exchange and hedge costs after the local currency weakened against the US dollar, company executives said yesterday.

The financial group, which relies heavily on its life insurance arm, Shin Kong Life Insurance Co (新光人壽), aims to focus on selling protection-oriented traditional and health insurance products this year to boost recurring income, senior vice president Sunny Hsu (徐舜鋆) told an investor conference.

“The group reported a net profit of NT$3.31 billion [US$112.7 million] last month, reversing a net loss of NT$1.76 billion in January,” Hsu said, attributing the gains entirely to a weakening NT dollar.

The local currency shed 2.4 percent against the greenback last month based on the average intraday rate of exchange as recommended by the Accounting Research and Development Foundation (會計研究發展基金會) to replace the central bank’s closing rate as benchmark, Hsu said.

The foreign exchange factor helped profits to stay in the black at NT$1.55 billion as of last month, translating into earnings of NT$0.18 per share, Hsu said.

“We took part in several property auctions, but failed,” Victor Hsu said, adding the company is cautious about purchases of undeveloped land plots as they must meet “the prompt and profitable utilization” requirement.